World Bank to Boost Lending in Response to Economic Crisis

The major high income and developing countries that set policy for the 185 member-nation World Bank agreed in Washington on Sunday that the bank should boost its lending to help poor countries adversely affected by the global economic slowdown.

World Bank President Robert Zoellick said the bank will boost its lending by $100 billion during the next three years, noting that the economic crisis has forced as many as 90,000,000 more people into extreme poverty. >>>

Budget deficits across the industrialised world will remain sky-high next year in spite of reduced spending on fiscal stimulus, the International Monetary Fund warned on Sunday.

It said the Group of 20 leading economies taken together would run a budget deficit of 6.5 per cent next year compared with 6.6 per cent in 2009.

The huge ongoing deficits owe more to the severe weakness in the world’s big economies than to discretionary spending on fiscal stimulus, which is set to decline in 2010.

The IMF put the US budget deficit at 8.8 per cent of gross domestic product next year, Japan’s deficit at 9.6 per cent and the UK deficit at 10.9 per cent.

The biggest deterioration will come in Germany, the IMF forecast, with the deficit jumping from 4.7 per cent of GDP to 6.1 per cent. The deficit will also move higher in France, to 6.5 per cent of GDP.

In many cases the estimates are worse than those prepared by individual nations. >>>